Barclays PLC has raised its forecast for the growth of the nation’s GDP this year to 4.1 percent from its previous prediction of 3.6 percent. The optimism stems from the better-than-expected 3.84 percent growth seen in the second quarter.
Barclays said that economic expansion in the second quarter beat its expectation of 3.4 percent. The 3.84 percent increment was also higher than the government’s earlier forecast of a climb of 2.79 percent.
An economist with Barclays Leong Wai Ho (梁偉豪) said the data for GDP in the second quarter showed that the nation’s economic recovery is accelerating on the back of an upturn in exports.
Leong said that as the fundamentals in the US and China were recovering, the nation should continue to benefit from the upswing.
UBS AG said the nation relies heavily on net exports to drive GDP growth.
As a result, if Europe’s economy resumes expansion and US growth accelerates, GDP growth could outstrip the consensus forecast of 4 percent for this year, the Swiss banking giant said in a research report on Thursday.
Several local economic think tanks have forecast the economy should grow more than 3 percent this year. Academia Sinica last month raised its estimate for the country’s economic growth to 3.31 percent from a previous prediction of 2.89 percent.
For next year, Barclays said it sees the economy continuing to accelerate, forecasting a GDP growth of 4.5 percent.
However, Daiwa Capital Markets Hong Kong Ltd — which raised its GDP forecast to 3.3 percent for this year from 3 percent — said it retained the 3.3 percent growth estimate for next year.
“There is still the risk that credit conditions in China might deteriorate next year. Also, it is not clear that real investment in Taiwan can maintain current growth momentum,” Daiwa Capital Market said in a report on Thursday.
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